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December 12, 2014 - Weekly Pricing Pulse
The IHS Materials Price Index (MPI) plunged 4.9% last week, on a broad-based move headlined by falling freight rates, oil, and chemical prices. It was the sharpest weekly drop since May 2010, and sets the fourth quarter on track to see the largest decline since fall 2008.
The selloff in crude oil migrated further downstream into chemical markets, which have now fallen for 10 consecutive weeks. Furthermore, all prices in the MPI chemical composite also hit new lows for the year.
A weakness in aggregate demand, particularly in emerging markets, continues to undercut prices. This softness is also reflected in the broad-based depreciation of currencies against the US dollar. These conditions are unlikely to improve over the coming months, placing further downward pressure on commodity prices into the first half of 2015.
Pricing and Purchasing – Supply Management